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UPDATE - SBA Releases Rules and Guidance for Second Round PPP Funding
January 7, 2021
Late yesterday (January 6, 2021), the U.S. Small Business Administration released rules and guidance for businesses wishing to take part in the long awaited second round of Paycheck Protection Program (“PPP”) funding. As most businesses are aware, the rules governing PPP loans have been updated as part of The Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (“Act”). The Act was just one section of the massive 2021 Consolidated Appropriations Act that was passed by Congress and signed into law by the President on December 27, 2020. To combat the ongoing disruptions caused by the COVID-19 pandemic, the Act generally provides (a) first time PPP loans for businesses that did not obtain a loan in the first instance, (b) PPP second draw loans for businesses that already obtained a loan but need additional funding, and (c) additional funding for businesses that returned their first PPP loan or did not get the full amount for which they qualified.
Blake R. Gerney and Christopher (CJ) Meager
HHS Provider Relief Funds Reporting Requirements: Important Updates Every Provider Should Know
November 4, 2020
HHS continues to revise its reporting requirements for the use of the Provider Relief Funds. Providers with more than $10,000 in Provider Relief Fund payments must report on the use of the funds through December 31, 2020. The reporting window will begin on January 15, 2021 and providers must complete reporting obligations for FY 2020 by February 15, 2021 through a portal designed by HHS. However, providers that have unexpended funds as of December 31, 2020, will have an additional 6 months to use the remaining funds through June 30, 2021. These providers must submit a second and final report no later than July 31, 2021.
Amanda L. Waesch
SBA Releases New Frequently Asked Question (No. 49) - Maturity Dates for PPP Loans
June 29, 2020
On June 25, 2020 the SBA released a new Frequently Asked Question (No. 49) concerning the maturity dates for PPP Loans as modified by the recently passed Paycheck Protection Program Flexibility Act. All PPP Loans received on or after June 5, 2020, will have a five-year maturity. Any PPP Loan received before June 5, 2020, has a two-year maturity, unless the borrower and lender mutually agree to extend the term of the loan to five years. Businesses should address the maturity issue with their SBA lender and discuss any available change to the loan maturity date.
Blake R. Gerney
Main Street Lending Program Waiting for Green Light from Congress – What We Know Now
April 17, 2020
What is the Main Street Lending Program? In response to the COVID-19 pandemic, the Federal Reserve established the Main Street Lending Program (“MSLP”) to enhance support for small and mid-size business that were in good financial standing before the pandemic. There are two subcategories to the MSLP: the Main Street New Loan Facility (“MSNLF”), which applies to newly issued loans for a company, and the Main Street Expanded Loan Facility (“MSELF”), which applies to refinancing of existing loans of a company. The main focus of MSLP is to retain employees (at least 90% of a business’s employees as of February 1, 2020). It is also intended to alleviate slow cash flow stress on profitable businesses.
Cassandra L. Manna & the BMD SBA Loan Team